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Innovation and Globalization Nov 8 2007
The document discusses innovation indicators and metrics. It notes that currently available indicators are limited and focus mainly on inputs like R&D spending rather than outcomes. It calls for the development of better measures that capture factors like knowledge, intangibles, management practices, and the service sector. The document also advocates using indicators to inform policy and creating a national innovation dashboard to track metrics and the overall innovation ecosystem.
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Innovation and Globalization Nov 8 2007
- 1. Egils Milbergs Center forAccelerating Innovation
- 2. 11-8-2007 Center forAccelerating Innovation 2 The Innovation Economy Capital Land Labor Knowledge & Intangibles Agriculture Industrial Knowledge
- 3. 11-8-2007 Center forAccelerating Innovation 3 Good News
- 4. 11-8-2007 Center forAccelerating Innovation 4
- 5. 11-8-2007 Center forAccelerating Innovation 55 Elephants and Dragons: The New Economic Superpowers? China Overtakes the G3; India is Close Behind Source: Goldman Sachs, Report 99 Germany 2000 0 50000 25000 2010 2020 2030 2040 2050 US China India Japan GDP ’03US$bn
- 6. 11-8-2007 Center forAccelerating Innovation 6 Competitiveness THEN Japan: • High-cost, high-wage, advanced tech - “just like us” • We have Entrepreneurial advantage, they have Industrial Policy advantage • Rule of Law • IP Protections • Subsidized currency, buying our debt • National Security: allies NOW China: New Mix • Low-cost, low-wage, advanced tech • Entrepreneurial • Using Industrial Policy • Limited Rule of Law • IP Theft model – FBI: $300b/year • Subsidized currency, buying our debt • Nat’l security – peer competitor
- 7. 11-8-2007 Center forAccelerating Innovation 7 U.S. R&D Investment the World’s Largest, But Others Increasing Their Investment Faster Source: OECD Data, Council on Competitiveness High % R&D/GDP
- 8. 11-8-2007 Center forAccelerating Innovation 8 Disintermediation of Value Chain Research Invention Product Dev. Design Creativity Engineering Prototyping Production Manufacturing Branding Marketing Distribution Services INNOVATION VALUE CHAIN VALUECAPTURED Advanced Economies Developing Economies
- 9. 11-8-2007 Center forAccelerating Innovation 99 PDA Cell phone PC Percent of U.S. households with: 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0 10 20 30 40 50 60 70 80 90 100 110 120 Years since product invented Television Radio Electricity Telephone Air Travel Automobile Innovation is Accelerating Sources: J. Gerry Purdy’s presentation “The Next 50 Years in Mobile and Wireless” at Silicon Ventures, Trade press, Industry sources Internet Center for Accelerating Innovation
- 10. 11-8-2007 Center forAccelerating Innovation 10 Continuous Improvement Path Design to x… Customer Satisfaction Cost Optimization Entrepreneurship New Products and Services Globalized Business Models Emergent/Disruptive Technologies Organic Innovation Structures Real Time/Self Configuring Enterprises short medium long Potential Activated By 2 – 3 % annually 5 – 10 % 20 – 30 % 30 – 40 % Time US Innovation Potential InnovationGain
- 11. 11-8-2007 Center forAccelerating Innovation 11 Innovation Model Is Shifting Development Linear Model Ecosystem Model Research Commercialization • Single discipline • Hierarchical governance • Closed system • Internal talent • Controlled process • IP hoarded • Product centric • Forecasting demand • Multidisciplinary • Self organizing relationships • Open innovation • Access talent everywhere • IP commons • Customer centric • Sense and respond
- 12. 11-8-2007 Center forAccelerating Innovation 12 ROCKFORD INNOVATION ECOSYSTEM Creative Class Meets to Develop a Global Innovation Hotspot Graphic Illustration of the forum
- 13. 11-8-2007 Center forAccelerating Innovation 13
- 14. 11-8-2007 Center forAccelerating Innovation 1414 How Innovation Ecosystems Evolve Growth Node Innovation Ecosystem Nascent Relationships Virtual ClusterTrajectory None or few firms Growth potential Few to many firms Fast growth Key linkages Virtualized functions Accelerated collaboration Many nodes Dense linkages Network to Network
- 15. 11-8-2007 Center forAccelerating Innovation 15 New Learning Systems Flexible Supply Chains Increased Efficiency Higher Quality Goods & Services Better Decision-making Unique Business Models Larger Markets Robust Research Tools Less Economic Volatility Adaptive Workforce Accelerated Productivity Innovative Products & Services INFORMATION AND COMMUNICATION TECHNOLOGY (hardware, software, applications, networks and telecommunications) Tax Revenues CompetitivenessLower Costs More Job Opportunities Revenues More Profits Higher Standard of Living GDP, Quality of Life Higher Wages More Choices Lower Prices Modified chart from: ITIF
- 16. 11-8-2007 Center forAccelerating Innovation 16 Innovation Vital Signs Joint Initiative: Surveyed 52 Public Reports, 3126 Indicators – 18 Global Reports – 10 National Reports – 15 Regional Reports – 9 Enterprise Reports Industry Indicator Survey – variety of sources and data types available Center for Accelerating InnovationCenter for Accelerating Innovation
- 17. 11-8-2007 Center forAccelerating Innovation 17 Business Models Value Outputs Impacts Market Demand Macro-Economic Conditions National Mindset Innovation Ecosystem Major Subsystems and Linkages Public Policies Infrastructure Talent Networks Capital R&D Source: Egils Milbergs Innovation Framework
- 18. 11-8-2007 Center forAccelerating Innovation 18 Global Indicators
- 19. 11-8-2007 Center forAccelerating Innovation 19 National Indicators
- 20. 11-8-2007 Center forAccelerating Innovation 20 Regional Indicators
- 21. 11-8-2007 Center forAccelerating Innovation 21 Enterprise Indicators
- 22. 11-8-2007 Center forAccelerating Innovation 22
- 23. 11-8-2007 Center forAccelerating Innovation 23 Innovation Indicators Are Evolving (slowly) 1st Generation Input Indicators (1950s-60s) 2nd Generation Output indicators (1970s-80s) 3rd Generation Innovation Indicators (1990s) 4th Generation Process Indicators (2000 + emerging focus) • R&D expenditures • S&T personnel • Capital • Tech intensity • Patents • Publications • Products • Quality change • Innovation surveys • Indexing • Benchmarking innovation capacity • Knowledge • Intangibles • Demand and outputs • Clusters and networks • Management practices • Risk/Return • System Dynamics Source: Milbergs and Vonortas, Measurement to Insight, a paper prepared for the National Innovation Initiative
- 24. 11-8-2007 Center forAccelerating Innovation 24 What Did We Learn? • Like human health no single indicator captures innovation’s changing nature and multiple features. • And report frameworks differ widely, no consensus • Measures are for manufacturing not service sector • Available indicators dominated by input R&D and Talent factors • Connection between inputs to outcomes is weak and non-linear • Output indicators focus on economic measures, not quality of life • Sparse “hard” indicators for industry management practices • Limited “soft” indicators on knowledge content, culture, intangibles, global innovation patterns, creativity, skill requirements • Timeliness, accessibility and presentation format needs considerable improvement
- 25. 11-8-2007 Center forAccelerating Innovation 25 Measurement Issues • Knowledge as assets • Global trade in tasks • Service sector innovation • Entrepreneurship • Intangibles • Linkages (beyond geographic clusters) • Innovation management practices • Relationship of indicators to policy • The national mindset and media
- 26. 11-8-2007 Center forAccelerating Innovation 26 Commerce Advisory Committee Measuring Innovation in the 21st Century INNOVATION DATA COLLECTION · Improvements in service sector data · Improvement in measurement of intangibles (including intellectual property) · Leverage understanding of innovation through expanded sharing of and access to existing data in firms STRUCTURE OF THE NATONAL INCOME AND PRODUCT ACCOUNTS · Development of annual, industry-level measures of total factor productivity · Creation of a national innovation account by BEA as a satellite account · Publish economic data based on data on firms as well as establishments to provide more meaningful estimate of employment in innovation occupations NEW INNOVATION OUTCOME MEASURES · Development of a firm level measure of innovation intensity such as the ratio of annual revenue from products launched in the last three years to total annual revenue · Development of a market share based measures · Development of a national index of innovation aggregating different measures INNOVATION RESEARCH · Assessment of the effect of collaboration and partnerships on innovation · Analysis of administrative records and survey data to identify entrepreneurial start-ups and study their early life cycle · Easier access to and analysis of publicly available firm data · Identification of drivers of and impediments to innovation
- 27. 11-8-2007 Center forAccelerating Innovation 27 Innovation Competitions • Demand side incentive • Expands range of ideas (e.g. Solar Decathlon) • Attracts innovators around the world • Inspires students • Empowers entrepreneurs • Raises public awareness of exemplary designs, products and services Aachen Innovation Prize
- 28. 11-8-2007 Center forAccelerating Innovation 2828 Concluding Points • US innovation policy is an incomplete cocktail—boosting inputs not outcomes. • National Innovation Dashboard: toward the right metrics and value creation • Solve “wicked problems” with innovation ecosystems • Innovation President essential to lead at national and global level.
- 29. Questions, comments andinsights Egils Milbergs Center for Accelerating Innovation www.innovationecosystems.com www.innovate.typepad.com emilbergs@msn.com